Your Termination Clause Might Be Perfect, But Your Employer Can Still destroy it
How the way an employer fires you can override a solid employment contract in Ontario
You're a senior professional. You've got a strong title, a compensation package with layers to it, base salary, bonus, pension contributions, benefits, maybe equity or a car allowance, and somewhere in a drawer or a forgotten email attachment, you've got an employment contract with a termination clause in it.
You probably didn't think much about that clause when you signed it. You were focused on the opportunity, not the exit. And if you're reading this now, there's a decent chance something just happened that has you digging that contract out for the first time in years.
Here's what I want you to know: even if that termination clause is airtight, your employer might have already made it invalid, not by how the clause was drafted, but by how they handled your termination.
The Case That Changed This Conversation
In January 2025, the Ontario Superior Court decided Timmins v. Artisan Cells (2025 CanLII 2387), and it clarified something that a lot of employers, and a lot of employees, don't yet understand.
Dr. Nicholas Timmins was a Chief Development Officer at a gene therapy company. Senior role, significant compensation, high-level responsibilities. His employment contract had a termination clause that entitled him to the greater of three months' pay or his statutory minimums under Ontario's Employment Standards Act, 2000 (ESA). That clause was likely enforceable. Nothing wrong with the drafting.
When the company let him go without cause, they paid him one week. Not even his ESA minimum. They told him he'd get the rest only if he signed a broad release, one that included non-disclosure and non-disparagement terms that were nowhere in the original contract.
The court didn't just award him the three months the contract promised. The court found that the employer had repudiated (breached) the entire employment contract by failing to honour its own termination provisions. The termination clause dropped out completely, and Dr. Timmins was awarded nine months of common law reasonable notice, $456,908, more than triple what the contract would have limited him to.
What Repudiation Means (and Why It Matters If You Earn a Significant Income)
Repudiation is the legal principle that when one party to a contract shows, through their words or conduct, that they don't intend to be bound by it, the other party can treat the contract as over. In employment law, this means an employer who doesn't follow through on its own termination clause can lose the right to rely on that clause at all.
The test is objective. The court doesn't ask whether the employer meant to breach the contract. It asks whether a reasonable person, looking at the employer's behaviour, would conclude the employer no longer intended to honour the deal. In an earlier case called Perretta v. Rand A Technology Corporation (2021 ONSC 2111), the employer said it had simply made an innocent mistake in calculating severance. The court found repudiation anyway. Intent doesn't save you.
Here's why this matters so much if you're a high-earning professional. Your termination clause probably limits you to somewhere between your ESA minimums and a few months' pay. But your common law reasonable notice entitlement, the amount a court would award if that clause weren't there, could be dramatically larger. Courts assess common law notice based on your age, length of service, the character of your role, and how hard it would be to find comparable employment. If you're a senior professional in a specialized field, that number can be substantial. We're talking 12, 18, even 24 months.
And common law notice doesn't just cover your base salary. It covers everything: bonuses you would have earned, pension contributions your employer would have made, benefits continuation, car allowances, stock option vesting — the full picture of what you would have received had you continued working through the notice period. For someone with a complex compensation package, the difference between the contractual amount and common law notice can be hundreds of thousands of dollars.
That's the gap that opens up when an employer repudiates the contract. And that's why how you were fired might matter more than what your contract says.
This Is Not the Same as a Badly Drafted Contract
If you've done any reading on termination clauses in Ontario, you've probably come across Waksdale v. Swegon North America (2020 ONCA 391). That case, and the wave of decisions that followed, dealt with clauses that were poorly written: language like "at any time" or just cause definitions that exceeded the ESA's strict wilful misconduct standard. If the drafting was off, the whole termination scheme could be struck down.
Timmins is a different animal entirely. The clause wasn't the problem. The employer's behaviour was.
Think of it this way:
The Waksdale question: Is the contract ESA-compliant on paper?
The Timmins question: Did the employer actually do what the contract says when it came time to fire someone?
An employer can have the best-drafted termination clause in the province and still lose the protection of that clause if it doesn't follow through. The contract is only as strong as the employer's willingness to honour it.
Red Flags: How to Tell If Your Employer May Have Repudiated Your Contract
If you've recently been terminated, here are the things to look at carefully. Any one of these on its own may be a problem. Several together can be devastating for the employer's position.
They paid you less than the contract promises. Your contract says three months. They paid you two weeks "to start" and said the rest would follow. Or they paid you ESA minimums when the contract promises more. In Timmins, paying less than the contractual amount was the centrepiece of the repudiation finding. It doesn't matter whether they did it on purpose, or because HR didn't read the contract carefully, or because someone in payroll made an error. The test is objective.
They're holding your severance hostage for a release. This is the pattern the courts have been most critical of. Your contract says you're entitled to a specific amount on termination without cause. It doesn't say anything about signing a release first. But the termination letter says you'll only receive your severance if you sign a full and final release within seven or fourteen days, and the release includes non-competition, non-solicitation, non-disparagement, confidentiality, and a broad waiver of every possible claim. That's exactly what happened in both Timmins and Klyn v. Pentax Canada Inc. (2024 BCSC 372). The employer was using money the employee was already owed as leverage to extract concessions the contract didn't entitle them to. The courts called it repudiation.
They're not paying your full compensation through the notice period. If your contract says you're entitled to three months' notice (or pay in lieu), that likely means three months of your full compensation, not just base salary. If the employer is stripping out your bonus, not continuing pension contributions, cutting your benefits, or ignoring equity vesting, they may not be complying with the contract. This is especially important for senior professionals whose base salary is only one component of a much larger package.
They haven't given you a Record of Employment. Employers must issue an ROE within five days of your last day of work. This is a federal obligation under the Employment Insurance Act, not the ESA, and failing to issue one doesn't automatically invalidate a termination clause on its own. But courts have awarded significant damages for late or inaccurate ROEs: $55,000 in aggravated and punitive damages in one 2022 Ontario Superior Court case, and $10,000 in punitive damages in a 2024 decision. More importantly, a missing ROE is often part of a broader pattern. An employer that can't be bothered to file your ROE is often the same employer that shorted your severance or is trying to strong-arm you into a release.
They told you it was "for cause", but paid you something anyway. This is a subtler red flag, but it matters. If the employer fires you for cause, the ESA says they owe you nothing (provided the conduct meets the very high threshold of wilful misconduct). If they're paying you something but calling it a for-cause termination, they may be hedging, and the termination letter and ROE may not align with reality. Inconsistency in how the termination is characterized can create both repudiation and bad faith arguments.
What Common Law Notice Actually Looks Like for Senior Professionals
When a termination clause is unenforceable, whether because of bad drafting or because the employer repudiated the contract, you're entitled to common law reasonable notice. This is assessed based on what are called the Bardal factors: your age, your length of service, the character of your employment, and the availability of similar employment.
For senior professionals, these factors tend to push the notice period significantly higher.
Character of employment is not just your title. It's your level of responsibility, the specialization of your role, and your seniority within the organization. A department head, a C-suite executive, a tenured professor, a senior researcher, these roles command longer notice periods because they're harder to replace and because comparable positions are harder to find.
Availability of similar employment is particularly important if you work in a niche field. If there are only a handful of organizations in Canada that do what yours does, and you're a senior person in that space, the court will recognize that your job search is going to take longer. Dr. Timmins worked in gene therapy, a highly specialized field, and this was a significant factor in his nine-month award despite only 3.5 years of service.
What gets included in the damages: Common law notice compensates you for everything you would have earned during the notice period, not just your base salary. This typically includes annual bonuses (prorated or in full, depending on how they're structured), employer pension contributions, benefits continuation or the cost of replacing them, car allowances, phone stipends, stock option or RSU vesting that would have occurred during the notice period, RRSP matching, and any other regular component of your compensation. For a senior professional earning $300,000 or more in total compensation, the difference between a three-month contractual payout and a 15-month common law award can easily exceed half a million dollars.
For Employers: How to Protect a Clause You've Already Paid to Draft
If you're reading this from the employer side, maybe you're an HR leader or in-house counsel, the message from Timmins is uncomfortable but simple: your termination clause is only as good as your termination process.
Pay the contractual amount immediately, in full, without conditions. If the contract says six months, pay six months. Don't hold back a portion. Don't stage it. Don't make it contingent on a release unless the contract already says so.
Offer a release separately, with fresh consideration. If you want a release (and you usually should), offer additional compensation above the contractual entitlement in exchange for it. The release consideration should be real and meaningful, not a token amount. And the terms of the release should be proportional; don't ask for non-competition and non-disparagement if what you're really after is a clean break.
Get the ROE right and get it filed on time. Five calendar days. Correct code (Code M for dismissal, with "without cause" in Block 18 if that's what it was). An inaccurate or late ROE is one of the easiest things for an employee's lawyer to point to as evidence of bad faith, and courts have not been shy about awarding damages for it.
Have an employment lawyer review the termination package before it goes out the door. Not just the contract — the termination letter, the severance calculation, the release terms, and the process. The contract drafting only gets you halfway. The execution is where Timmins tells us the real risk lives.
What to Do Right Now If You've Just Been Terminated
If you're sitting with a termination letter and a release on your kitchen table and something doesn't feel right, here's what I'd tell you.
Don't sign anything yet. Most releases have a deadline, and most deadlines are negotiable. Signing before you understand your rights can cost you significantly. There is no legal obligation to sign a release by the date your employer picked.
Find your employment contract and read the termination clause. Look at what it says you're entitled to on termination without cause. Then compare that to what your employer actually offered. If there's a gap, if they paid less, added conditions, or changed the terms, that's the conversation you need to have with a lawyer.
Pull together your full compensation picture. Base salary, bonus history (last two to three years), pension contributions, benefits, car allowance, phone, equity, everything. Common law notice is calculated on the whole package, so knowing what you actually earn, not just your base, is essential to understanding what you might be entitled to.
Check whether you've received a Record of Employment. You can see electronic ROEs through your My Service Canada Account. If it hasn't been filed within five days of your last day, or if the reason code doesn't reflect the reality of your termination, make a note of it.
Talk to an employment lawyer before the release deadline. Not after. A lawyer can tell you very quickly whether the termination clause is enforceable, whether the employer's conduct may have undermined it, and what your common law notice entitlement likely looks like. That information changes everything about how you approach the negotiation.
Frequently Asked Questions
Can an employer repudiate a termination clause by accident?
Yes. The test for repudiation is objective. The court asks whether a reasonable person would conclude the employer no longer intended to be bound by the contract, not whether the employer meant to breach it. In Perretta v. Rand A Technology Corporation (2021 ONSC 2111), the court found repudiation even after the employer said it had made an innocent mistake in calculating severance.
Does failing to issue a Record of Employment invalidate a termination clause in Ontario?
Not on its own, based on current case law. The ROE obligation is under the federal Employment Insurance Act, not the employment contract itself. However, courts have awarded $10,000 to $55,000 in aggravated and punitive damages for late or inaccurate ROEs. When combined with other conduct, like underpaying severance or conditioning payment on a release, the failure to issue an ROE strengthens a broader repudiation argument.
What is the difference between Waksdale and Timmins v. Artisan Cells?
Waksdale v. Swegon North America (2020 ONCA 391) invalidates termination clauses because of deficient drafting — the words in the contract violate the ESA. Timmins v. Artisan Cells (2025 CanLII 2387) invalidates termination clauses because of employer conduct — the clause is fine, but the employer didn't follow through on what it promised. Both result in the employee receiving common law reasonable notice, but they operate through different legal principles: statutory non-compliance (Waksdale) versus contractual repudiation (Timmins).
What is common law reasonable notice in Ontario?
Common law reasonable notice is the amount of notice (or pay in lieu) a court determines is appropriate when an employee is terminated without cause and no enforceable termination clause limits their entitlement. It is assessed based on the employee's age, length of service, character of employment, and the availability of comparable employment. In Ontario, common law notice periods can range from a few weeks for junior, short-service employees to as much as 24 months for long-tenured senior professionals.
What compensation is included in a common law notice award?
Common law notice damages are intended to put the employee in the position they would have been in had they worked through the notice period. This typically includes base salary, bonuses that would have been earned or vested, employer pension contributions, benefits continuation, car allowances, stock option or RSU vesting, RRSP matching, and any other regular component of compensation. For senior professionals with complex packages, the total damages can be significantly higher than base salary alone.
Can an employer require me to sign a release before paying my contractual severance?
Only if the employment contract itself makes payment conditional on signing a release. If the contract simply says the employer will pay a specified amount on termination without cause, the employer must pay that amount unconditionally. Withholding contractual severance to pressure an employee into signing a release — particularly one that includes terms like non-disclosure, non-disparagement, or a broad claim waiver not contemplated in the original agreement — is precisely the conduct that was found to constitute repudiation in Timmins v. Artisan Cells and Perretta v. Rand A Technology Corporation.
How long do I have to sign a release after being terminated in Ontario?
There is no legally mandated timeline. Employers often include a deadline (commonly 7 to 30 days), but these deadlines are set by the employer, not by law. You are entitled to take the time you need to obtain legal advice before signing. If the deadline feels aggressive, that itself may be worth discussing with an employment lawyer, particularly if payment of amounts you're already owed is being made conditional on signing by that date.
The Takeaway
Ontario employment law has spent half a decade focused on how termination clauses are written. Timmins v. Artisan Cells is a sharp reminder that how they are performed matters just as much.
For employers: the clause only protects you if you follow it to the letter. Every shortcut in the termination process, shorted payments, conditional releases, and missing ROEs, is a crack in the foundation of the contract you spent good money drafting.
For employees: if something about your termination doesn't match what your contract says, don't assume the contract is the final word. Your employer's own conduct may have handed you a much stronger position than you realize.
Nicole Biros-Bolton is the Principal Lawyer and Founder of Bird Bolt Law Professional Corporation, a boutique employment, human rights, and education law firm in Hamilton, Ontario. She practises trauma-informed, client-centred employment and human rights law, and can be reached at nicole@birdboltlaw.com or found on TikTok and Instagram as @empathylawyer.
This blog post is for general informational purposes only and does not constitute legal advice. Every situation is different. If you have been terminated and believe your employer has not complied with your employment contract, contact us to discuss your specific circumstances.